Citi Makes Strategic Investment in Cicada to Facilitate Institutional e-Trading of Mexican Government Bonds
May 08 2024 - 8:33AM
Business Wire
- Cicada has built an innovative all-to-all electronic
alternative trading system for global institutional market
participants that trade Mexican government bonds.
- Citi has made a strategic minority investment in Cicada and
will act as a liquidity-provider for the trading platform.
Citi has made a strategic minority investment in Cicada
Technologies Inc.
The investment was made by Citi’s Markets Strategic Investments
unit, which is responsible for the sourcing and execution of
strategic investments relevant to Citi’s Markets franchise. Citi
will also act as a liquidity-provider for the trading platform.
Cicada is a fintech based in Greenwich, CT that also has a
presence in Mexico. Citi joins existing investors Kaszek Ventures,
Dila Capital and BCP Securities.
Cicada has built an innovative all-to-all electronic alternative
trading system (ATS) that helps global institutional buy-side and
sell-side market participants trade Mexican Government fixed-income
securities without the need of a pre-existing trading relationship.
The ATS is registered with the SEC and the broker-dealer activities
of Cicada Securities LLC (a subsidiary of Cicada technologies Inc.)
are regulated by FINRA.
Cicada enables the e-trading of 28 Mexican government bonds,
including: nominal fixed-rate notes (Mbonos) and inflation-linked
securities (UDIBonos) that can settle in Indeval, Euroclear or
Clearstream. The company is also looking to enable the trading of
Cetes (Mexican T-bills), TIIE (Mexican interest rate swaps),
Mexican corporate bonds and other emerging markets government
securities.
The size of the Mexican fixed income market is about $500
billion with an average daily trading volume of approx. $5 to $7
billion, according to data from Banxico. The market is lagging in
electronification versus other asset classes. It’s estimated by
Banxico that at least 85% of local bonds are traded by voice and
OTC via traditional non-electronic brokers. To solve this, Cicada
aims to enable technology adoption among market participants with
the goal of migrating these volumes to e-trading.
Jose Luis Yepez, Head of Local Markets Rates Trading at Citi,
said: “As a leading liquidity provider in the Mexican government
bond market, our participation in Cicada’s platform reflects our
ambition to be at the forefront of electronic trading.”
Cicada aims to speed the adoption of e-trading via a Central
Limit Order Book (CLOB) and Request for Quotes (RFQ) protocols. The
platform also offers automation tools for buy-side and liquidity
providers, efficient execution of trades, connectivity to
post-trade services and data analysis of live and historical bond
prices.
Ignacio Tovar, co-founder of Cicada said “Traders are embracing
technology quickly, and currently 15 well-known institutions are
active on the platform and 10 are in the process of joining. Since
launching last year, the trading volume on the platform has grown
15 times.”
“We are excited to invest in Cicada. The technology of the
trading platform together with Citi’s partnership has the potential
to enhance the efficiency of the multi-billion-dollar Mexican fixed
income market,” said Aldo Alvarez, LatAm Lead at Citi’s Markets
Strategic Investments unit.
Through investments in start-ups and early-stage companies, MSI
promotes the development and adoption of new technologies, market
structure and solutions to drive innovation.
About Citi
Citi is a preeminent banking partner for institutions with
cross-border needs, a global leader in wealth management and a
valued personal bank in its home market of the United States. Citi
does business in nearly 160 countries and jurisdictions, providing
corporations, governments, investors, institutions and individuals
with a broad range of financial products and services.
Additional information may be found at www.citigroup.com | X:
@Citi | LinkedIn: www.linkedin.com/company/citi | YouTube:
www.youtube.com/citi | Facebook: www.facebook.com/citi
About Cicada
Cicada Technologies, Inc. is a financial technology firm that
develops and operates electronic trading solutions for global
institutional clients. In 2022, Cicada launched an innovative
all-to-all electronic alternative trading system (ATS) that helps
global institutional buy-side and sell-side market participants
trade Mexican Government fixed-income securities among each other
without the need of a pre-existing trading relationship. The ATS is
registered with the SEC and broker-dealer activities of Cicada
Securities LLC (a subsidiary of Cicada technologies Inc.) are
regulated by FINRA.
Additional information may be found at www.cicada.io | LinkedIn:
www.linkedin.com/company/hellocicada/mycompany/
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508325267/en/
Media Citi Rekha Jogia-Soni Rekha.JogiaSoni@citi.com
Cicada Ignacio Tovar Ignacio.tovar@cicada.io
Javier Hernández Javier.Hernandez@cicada.io
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